Get Mortgage Valuations Direct – Cut out the Middleman says Lawrenson of LettingFocus.com

As a former strategist and project manager who worked at Direct Line and Lloyds TSB I know all the clever ways that banks have for relieving customers of money even without them actually realising they have been relieved of it.
One very smart way that mortgage firms have of making money on mortgages is by taking a juicy cut on valuations.
Here is my story. A year ago I talked to a badly briefed person at a call centre of the UK biggest buy to let mortgage companies. He said “Yes, I could arrange my own valuation direct with a RICS surveyor.” Actually that turned out to not be company policy but I took a record of the time and date of call –and so I had the lender over a barrel – so they let me go ahead and do it. The cost was £175 through E Surv surveyors.
Fast forward a year and this time I’m with another lender – this time a big high street bank – and taking out a mortgage for an identical property – but unfortunately for me their call centre is better briefed and the lender insists I do it through them. The cost is £270 – or £95 more than the year before.
Also, unlike last time I don’t actually get to see the copy of the report – if I had been offered that option (which I wasn’t as it happened) then that would have been another £25 apparently.
So there we are folks.
That is another nice earner for the mortgage lenders – making money on valuations.
Of course the lenders will say “Oh the cost of administering it is so much”
Mmmm, in these days of electronic transfer of data, I don’t think so somehow.
Sure there are costs involved but none that justify sticking 30% on the fee they are charged by the surveyors cannot do much about all this. Make a sound and they will find themselves thrown off the lender’s panel of approved surveyors. And it won’t matter which ahem “club” they are in.
My message to you is if you are getting a mortgage always try to see if you can arrange a survey direct. Try it on with the call centre. With a bit of luck you’ll get someone who is badly briefed and they will say yes. Take a note of the time of the call in case they try to dispute they ever agreed to it.
And my message to the press is it’s about time you did a story on this.
ABOUT LETTINGFOCUS.COM and DAVID LAWRENSON
I’m David Lawrenson a buy to let experts from lettingfocus.com.
I’m the author of “Successful Property Letting - How to Make Money in Buy to Let” which for the last 2 years has been the UK’s top selling property title: buy the UK's top selling property investment book
It is fully up to date with all the recent changes to tenancy deposit schemes, HMOs, licensing, capital gains taxes and it has new sections on buying property below market value. I’m an expert property speaker and a well known property blogger and I contribute to newspapers and a host of property websites, write a number of columns in the press and I can provide help for landlords
Check out where I was recently featured in the Daily Telegraph: http://propertyclub.telegraph.co.uk/Page/View/266
I also work as a consultant helping banks, building societies, housing associations and web portals with their buy to let and property products and services and am a regular speaker at property shows.
You can read more of my blog & find details of my networking, advice, property investors networking programme at my website.What’s unique about lettingfocus.com is that we offer property investment mentoring because unlike most people in the buy to let and property “advice” business we are not linked to a property company, a developer, an agent or bridging loan financier and do not receive commissions from any of these sources.If a property investment is lousy – We’ll tell you straight and we will tell you all about buy to let and property investment - the good and the bad and we won’t make silly promises that you’ll become a millionaire overnight.
Copyright: David Lawrenson 2008. This blog is updated once a week. Permission must be sought before using the material in the blog.

Record keeping for landlords in buy to lets – from LettingFocus.com

The cut in base rate today will be a shot in the arm for the housing market. And the news that the biggest mortgage lenders will be passing on the cut in full is better news still.
As you may know, I have all my mortgages linked to the Bank of England’s base rate, not to the lender’s arbitrary SVR rate – the SVR is, of course, only adjusted when the mortgage lenders feel like it or when competitive pressure forces a change on them. Many people have found this to their cost recently!
And in recent years I have tended to opt for lifetime base rate trackers too.
The reason I like lifetime trackers is that I tend to hold my properties for a long time and the hassle of switching to a lower mortgage rate is something I can do without.
Being on a lifetime tracker also ends up costing less in the long run as you won’t have to pay the mortgage companies ever steeper “application fees” every few years.
Shorter term variable rates mean you have to change to a different mortgage deal to avoid the dreaded SVR every time your deal expires -each time costing you money in fees.
What about the housing market?
Well, house prices are going down and bargain properties are there to be had. I know, I’m out there and there are bargains galore to be had.
As you know, I don’t think the downturn will be that hard for well located bread and butter type properties where tenant demand is strong, so it is now time to get out there and negotiate good deals.

RECORD KEEPING
Before I go, just a quick note on landlords record keeping….
As landlords, we can be so busy running about building up our property portfolios and then managing them that it is often all too easy to forget the paperwork or leave it “to another time”
However, keeping up to date with your records is essential.
Here are my tips.
At the start of a tenancy you will have the tenant’s application form and / or references combined with any background checks that you do on them. Keep these until the tenancy has run its course because this is gold dust if you need to trace a tenant.
Get into the habit of keeping a written record of when something happens on each of your properties. This might be as simple as a record of a phone conversation where you agreed to do (or not do something) or it could be a written record of a report of say, a physical inspection or a gas or electrical certificate or an estimate for a repair or a change to the inventory.
Landlords who don’t have a thorough and up to date inventory which lists the state and condition of the property and everything in it –right down to the colour, make and model number of each item – risk losing out when the tenancy comes to an end.
Another good idea when decorating is to keep a note of the paint colour used in each room in case you need to “touch it up” at a later date.
Right now I’m advising a landlord who let a property without doing an inventory and who has now fallen out with his tenant. In the worst case the tenant could take all the furnishings that were in the property when the tenancy agreement was entered into. If that were to happen the landlord would have a very difficult job to recover any losses to his inventory.
Keep records for the taxman too. This would include records of allowable costs incurred, rents charged, dates that the property was let out, bank statements, invoices and receipts.

HMRC INVESTIGATIONS
HMRC could, if they were doing an investigation, ask you about any payments made into your bank account so it is useful to make a note of what these are for as well.
These sorts of records should be kept for six years if you are self employed or running your rental property as a sideline to your main job or seven years if you have a limited company.
Some records should be kept for longer than six years for capital gains tax purposes. Where you sell a property you may be liable to CGT so you will need a record of the dates you bought and sold it and the prices paid until you sell.
Look out for me in the Daily Mail on Friday and Daily Telegraph on Saturday.
I’m David Lawrenson from property investment mentors lettingfocus.com.
I’m the author of “Successful Property Letting - How to Make Money in Buy to Let” the UK’s top selling property title. buy the book
It is fully up to date with all the recent changes to tenancy deposit schemes, HMOs, licensing, capital gains taxes and it has new sections on buying below market value. I’m an expert on the UK property market and a well known property investment blogger and I contribute to newspapers and a host of property websites, write a property investment blog, a number of columns in the press and run a landlords advice service.
I also work as a consultant helping banks, building societies, housing associations and web portals with their buy to let and property products and services.You can read more of my blog & find details of my networking, advice, buy to let networking programme at my website.What’s unique about lettingfocus.com is that we offer independent property mentoring because unlike most people in the buy to let and property “advice” business we are not linked to a property company, a developer, an agent or bridging loan financier and do not receive commissions from any of these sources.If a property investment is lousy – We’ll tell you straight and we will tell you all about buy to let and property investment - the good and the bad and we won’t make silly promises that you’ll become a millionaire overnight.
Copyright: David Lawrenson 2008. This blog is updated once a week. Permission must be sought before using the material in the blog.

Mortgage Rates & Repossessions are up but not that much says Letting Focus

So the Monetary Policy Committee, (MPC), bowed to pressure and cut the Bank of England Base Rate by another quarter point to 5.25%.
For borrowers on tracker rate mortgages linked to the Bank of England Base Rate this is of course good news.
But given the current credit issues many lenders may decide not to pass on the full interest rate cuts as they struggle with their own profitability levels meaning many borrowers on products linked to lenders own standard variable rates will lose out again.
However, the good news is that there are still many lenders actively looking for remortgage business from people with good credit records and the coming months and falling base rate will give those previously worried about remortgaging and extra fillip to do so, especially as valuation and legal costs are sometimes included in many of the remortgages now available.

Good News
I think the rate cut is good news for Buy-To-Let landlords who are enjoying the current conditions.
With property prices easing off, rates falling and rents going up fast, this is rightly seen by many as a year of opportunity.
Yesterday I did a quick “trip” around the mortgage lenders. I found that once you spread the typical ubiquitous “application fee” over the average three year term, you are now finding that mortgage rates come in about 0.95% above BOE base for the bog standard buy to let loan - which is a wee bit above the .75% above BOE last time I did the maths back in the summer and before the credit crunch really hit.
So, not that bad, all in all!
However, loan to values much over 80% are pretty scarce and if they do come, they come at a higher interest rate.
As usual, apart from the likes of Bradford and Bingley and a few others, most mortgage lenders on the high street are still completely clueless about buy to let other than, “Here is your rate mate.”

Clueless Mortgage Companies
When I asked about tenancy deposit schemes, two of the biggest lenders on the high street said, “We don’t do those, sir.”
Oh how I laughed!
One day, their staff will get some training on this. One day.
So, if you are a high street lender and you don’t understand buy to let, I’m one consultant who would love to help you!
Today, we got the latest mortgage repossession figures. Again - not too bad really!
OK, the 2007 repossession figures are up on last year but still massively down on those seen in the early nineties, when nearly 80,000 were recorded in one year compared with 27,100 last year. The figures today are reportedly, slightly lower than those of 1999 so this is by no means the worst the market has seen. Still, the media gobbled it up with glee as more proof that the housing market is set to implode.
I still am not convinced of that at all.

About LettingFocus
If you need more advice on where to buy investment property ask me. I’m David Lawrenson from independent property investment experts www.lettingfocus.com
I’m the author of the landlords bible “Successful Property Letting - How to Make Money in Buy to Let” the UK’s top selling property title.
I’m an expert on property letting and a well known writer on buy to let and I contribute to newspapers and a host of property websites, write a property investment blog and run a landlord and tenant advice service.
I also work as a consultant helping banks, building societies, housing associations and web portals with their buy to let and property products and services.
You can read more of my landlord blog and details of my networking, advice, property investors seminar programme at my website www.lettingfocus.com.
What’s unique about lettingfocus.com is that we offer independent property investment mentoring because unlike most people in the buy to let and property “advice” business we are not linked to a property company, developer, agent or bridging loan financier and do not receive commissions from any of these sources.
If a property investment is lousy – We’ll tell you straight and we will tell you all about buy to let and property investment - the good and the bad and we won’t make silly promises that you’ll become a millionaire overnight.
Copyright: David Lawrenson 2008. This blog is updated at least twice a week. Permission must be sought before using the material in the blog.